Home Loans for Single Mothers: Do you Know How to Play the Game?

Home loans for single mothers can be a slippery slope. However, you should never take it personal. It’s just a game based on numbers.

You don’t have a chance to win if you don’t know the rules.

This has nothing to do with you as a person, but the numbers that are attached to you.

So I’ll cover things the evil bankers look for and what you can do about it. I’ll also go over a couple of programs ran by the good guys to help you out.

My job is to make it this an easy read. I will not talk financial jargon with you. You do need to know what some terms are.

I’ll just break them down in a common sense way. First let’s cover some programs that help single moms get a house.

HUD Program

We all know HUD offers housing assistance. What many people don’t know is HUD has home-buying programs also. One of the first things you can do is contact a housing counselor.

Or you can search for programs according to your state. HUD also has a program to help people turn their voucher into a mortgage payment

You can also just by a house outright from this agency. They sell cheap houses to the public. You can search the website and/or contact a realtor.

Habitat for Humanity

This is an organization that offers home ownership through what I would call easy financing. The kicker is that they don’t make a profit off your mortgage. What makes this program unique too is you will actually work on your own house.

Here is a list for what it takes to get accepted with Habitat for Humanity.

  • Be citizens or legal residents.
  • Prove steady income.
  • Have good credit.
  • Earn a monthly income that falls within minimum and maximum limits, depending on household size.
  • Sustain a savings account over a specified period of time.

You can go here to find out more information about this great organization. Now I have a question.

Have you ever heard the name Warren Dunn?

Yes, he’s the football player that helps single mothers get homes. His charity partners with Habitat for Humanity. If you haven’t heard about warren, here’s a video clip you should check out.

Warning: It might get to your emotions. Enjoy!

Individual Development Accounts (IDAs)

Individual Development Accounts (IDAs) are matched savings accounts that help people with modest means  save towards the purchase of a lifelong asset, such as a home.

There are requirement of course, but they serve a purpose. You also don’t have to use them for a house down payment. If you’re starting a business you can start an account for that.

Click here to find out who offers this service in your area. I was able to locate this service in my city. A local church is offering it. So just do the search and don’t hesitate to call and ask questions.  

Now that we have discussed some programs to give you a great start, we need to get to the boring part. Many of the services mentioned earlier will require you to learn these same things we cover. You might as well get an early jump.

Like I said earlier, it's just the basics so don’t get alarmed. Learn the rules of the game to give yourself a better chance to win.

Do You Know How Credit Affects You

I know, I know…I don’t like to look at or discuss my credit score either, but it’s necessary.

Instead of focusing on the negative, here’s a quick list of things you can do to improve your score.

  1. Know your credit score and get a report
  2. Pay your bills on time
  3. Get a secured credit card to boost your score
  4. Consolidate your loans

There’s so much information out there on what to do. Just know that this is the single most important thing when it comes to home ownership.

Debt to Income Ratio (DTI)

This is the part of the game that involves your income. Some single mothers think you have to make tons of money monthly to qualify for a home loan. This is not necessarily true. More money will help, but what you’re doing with that money is more important.

Debt-to-income is almost exactly what it sounds like. The bankers will look at more than just your debt though. Insurance payments, taxes and things of that nature can be included also.

You want to keep this ratio under 43%. Don’t worry; I’m going to show you want this means. If you make $3,000 monthly and $1000 is going out, your DTI would be at 33%.

All I did was divide the 1k by 3k to get this number. So you can figure out your own DTI using this simple math. There are some more formulas but they’re complicated. The lower your DTI the better off you’ll be.

Down payment/Closing Costs

If you ever got a car you know what a down payment is already. Closing costs are just fees they charge for their service, which is included in the down payment.

Unlike a car, you will need a lot more money down. 10% of what it takes to purchase the house is usually good enough.  The programs mentioned above can help you get the money or get this waived for you.

New Home No Ceilings 

Home loans for single mothers can be intimidating. Trust me, I’m living it now. I have no doubt you can do this. The main thing is to get educated.

Find somebody in your situation that has done it. They’ll let you know how to go about it. You can find so much information on the web.

Whatever you do, don’t get discouraged. A lot of these programs require patience, especially dealing with the government.

One more thing, don’t be afraid to hit up the comments and ask questions, or share your experience. We’re waiting to hear from all of you.